MEMO/05/124

Brussels, April 12, 2005

Questions and Answers: The Commissions MDG Package (Millennium Development Goals)

1. What is the package about?

The Commission has approved today 3 Communications on the subject of the MDGs (Millennium Development Goals). The documents suggest the Unions joint undertakings for the MDG progress review at the UNs General Assembly in New York in September this year. The package makes proposals in the areas of Finance for Development, Coherence for Development and Focus on Africa. Commissioner Michel stated that these proposals if supported by Council and Parliament - will put the EU as the worlds largest donor in the political lead.

2. Why do we need these proposals?

In September 2005 the UN General Assembly will review progress towards achieving the Millennium Development Goals which were agreed by the world community in 2000. These MDGs have become the central theme of global development cooperation efforts. The EU has at several occasions underlined the importance of the MDG Review in September as a decisive opportunity to accelerate progress towards achieving the MDGs. In November 2004, the Council invited the Commission to prepare specific and ambitious proposals for action, in particular in the areas of Finance for Development, Coherence for Development and Focus on Africa`. As the worlds biggest donor (over 50% of worldwide official development assistance - ODA), the EU has an important role in the process of achievement of the MDGs. Several reports taking stock on the fulfilment of the MDGs have identified substantial shortcomings, in particular in subsaharan Africa. Calculations show that given the current speed of progress some MDGs would only be achieved in several decades. This is morally and politically unacceptable.

3. What is new in the Commissions proposals?

Focus on Africa: The Commission wants the Union to make a difference in areas where it has a comparative advantage or where it can fill existing gaps and catalyse the actions of other partners. The Communication proposes to assign Africa a political priority and to accelerate the EUs actions in a limited number of areas: - the volume of resources should be increased, a sufficient share of the rise in official development assistance should go to Africa - all proposals on policy coherence and on quality of aid should be applied in Africa as a priority. The aim is to formulate a common European response.

- the Commission proposes key commitments for action in a number of areas identified by the Africans themselves as crucial to their development, these include: (a) (b) (c) improving Africas governance interconnecting Africas networks and trade striving towards equitable societies, access to services and environmental sustainability.

Coherence for Development: Commitments on coherence already steer EU policies. However, with the present communication, these commitments and actions are assessed within the framework of global efforts to achieve the MDGs. With this, the EU reconfirms and strengthens its engagement to effectively deliver and monitor delivery within the given MDG timeframe between today and 2015. In reply to the Council request to look at options to strengthen the coherence of EU policies in support of attaining the MDGs, the Commission has identified a number of priority areas including trade, environment, agriculture where the challenge of attaining synergies with development policy objectives is considered particularly relevant. For each of these priority areas the Commission has defined general orientations, or coherence for development commitments that it considers relevant contributions to accelerating progress. The Commission invites the Council, the European Parliament and the European Social and Economic Committee to confirm its acceptance of these commitments, as a joint engagement of the EU and its Member States towards improved coherence, and a substantial EU contribution towards the MDGs More finance and improved aid delivery are important, but in itself not sufficient to allow the developing world to reach the MDGs by the year 2015. For this purpose the contribution of non-aid policies in attaining the MDGs must also be considered. (see also points 6 and 7) Finance for Development: Following the Councils mandate to present concrete proposals on setting new and adequate ODA targets for the period 2009-2010 while taking into account the position of the new Member States, the Commission proposes two intertwined targets to be reached by 2010: - individual ODA targets for each Member State, differentiated between old and new Member States: The Commission proposes old Member States to increase their ODA to a new individual baseline of 0.51% GNI, in case they have not yet reached it. The Commission proposes the new Member States to reach 0.17% GNI. - a collective average target for the Union of 0.56% ODA/GNI. Both targets if achieved - could allow the EU to reach 0.7% of ODA by 2015. This would put the EU as the worlds largest donor in a position to comply with a basic international aid target. In addition, the proposal ensures fair burden sharing between Member States.

4. What are the financial implications?

Increasing ODA commitments will ultimately fall back on the national budgets of the Member States. However, the financial impact on the overall size of national budgets is expected to remain limited as ODA allocations would increase gradually and over a period of 10 years.

The Commissions proposals could mobilise impressive resources and almost double the Unions yearly budget for public development aid in 10 years: The Unions ODA per year in estimated figures could increase from EUR 46 billion in 2006 to EUR 66 billion in 2010 (average target of 0.56% ODA/GNI) and top in 2015 with more than EUR 90 billion (at average target of 0.7% ODA/GNI).
2006 ODA %GNI ml "Old Member States" - individual target of 0,51% EU15 45788 0,43% "New Member States" - individual target of 0,17% EU10 Collective target of 0,56% EU25 474 0,09% 2010 ODA ml %GNI GAP 2010-2015 ODA %GNI ml

65988

0,58%

24054
(p.m. gap to 0,33%)

0,12%

993

0,17%

1128

0,16%

46262

0,42%

66980

0,56%

25182

0,14%

(Estimated figures per year)

5. What is the Member States track record up to now?

Four Member States (Denmark, Luxemburg, the Netherlands and Sweden) have already achieved the goal of 0.7 % ODA/GNI and have committed to keep their ODA at least at that level. Six other Member States (Belgium, France, Finland, Ireland, Spain and the United Kingdom) have already fixed firm timetables to achieve this target prior to 2015.

6. How can aid be made more effective?

Development is not only a matter of the means such as finances, it is also a question of the most effective ways. To register effective progress in the developing countries, both must be pursued and the ultimate responsibility for development and the respect of the MDGs must remain in the hands of the developing countries themselves. To explore the most effective ways of development, the Council has also mandated the Commission to explore innovative ways of financing and stated that the EU will reconsider, among other things, long-term solutions to the debtburden. The Commissions proposals in this area touch upon a variety of issues including: - better value for money: available funds should be used more effectively, by reducing transaction and administrative costs and by avoiding duplication of funding through enhanced complementarity of aid between individual EU Member States and between Member States and Community-managed aid. In this context, the Commission welcomes the considerable progress within the Union on the commitment for aid effectiveness which was presented to the Paris High Level Forum on Aid Effectiveness of the OECD in March this year. In the documents approved today, the Commission stresses the importance of effective progress in delivery on this issue in the field. - untying of aid: The Commission calls for a rapid conclusion of legislative work on relevant proposals in the Council and the Parliament and requests the compliance of Member States tender procedures for bilateral aid with singlemarket rules.

- improved effectiveness of trade-related assistance - support for an EU action plan on international public goods - proposals to accelerate work on most promising and feasible options for innovative additional sources of finance. The Commission suggests that the EU explores the scope for a joint European initiative in this area.

7. What are the Barcelona Committments?

The Barcelona Commitments consist of 8 political commitments which the EU agreed as its contribution to the international conference Financing for Development in Monterrey in March 2002. The commitments were made in two areas: - Commitments on ODA, volume and sources: increased ODA volumes, innovative sources of financing, initiatives concerning Global Public Goods (GPG) and debt relief for Heavily Indebted Poor Countries (HIPC); - Commitments on aid effectiveness: closer coordination of policies and harmonisation of procedures, untying of aid, trade-related assistance (TRA), the reform of the International Financial System. The Council has mandated the Commission with the monitoring of the implementation of the commitments. The Communication, supplemented by the staff working paper, is the third annual monitoring report to take stock of the progress achieved. The Commissions monitoring of the fulfilment of the Barcelona commitments show that the Union is generally on track. The Commission therefore suggests to update and reinforce the commitments. A further strengthening of the Barcelona committments by the Union would send a strong joint signal to the UNs General Assembly meeting in New York in September.

8. Which Documents were approved today?

The Commission approved three Communications today. The three Communications are known as the MDG-Package: - Communication de la Commission au Conseil, au Parlement Europen et au Comit Economique et Social : Acclrer les progrs vers la ralisation des Objectifs du Millnaire pour le Dveloppement - La contribution de lUnion europenne - Communication of the Commission to the Council, the European Parliament and the Economic and Social Committee: Policy Coherence for Development Accelerating progress towards attaining the Millennium Development Goals - Communication of the Commission to the Council and the European Parliament: Accelerating progress towards attaining the Millennium Development Goals Financing for Development and Aid Effectiveness

ANNEX:

What are the MDGs?

By the year 2015, all 191 Member-States of the UN have pledged to meet the following 8 goals. The goals and targets are interrelated and should be seen as a whole. They represent a partnership between the developed countries and the developing countries to create an environment at the national and global levels alike which is conducive to development and the elimination of poverty. Eradicate extreme poverty and hunger: Reduce by half the proportion of people living on less than a dollar a day Reduce by half the proportion of people who suffer from hunger Achieve universal primary education: Ensure that all boys and girls complete a full course of primary schooling Promote gender equality and empower women: Eliminate gender disparity in primary and secondary education preferably by 2005, and at all levels by 2015 Reduce child mortality: Reduce by two thirds the mortality rate among children under five Improve maternal health: Reduce by three quarters the maternal mortality ratio Combat HIV and AIDS, malaria and other diseases: Halt and begin to reverse the spread of HIV/AIDS Halt and begin to reverse the incidence of malaria and other major diseases. Ensure environmental sustainability: Integrate the principles of sustainable development into country policies and programmes; reverse loss of environmental resources Reduce by half the proportion of people without sustainable access to safe drinking water Achieve significant improvement in lives of at least 100 million slum dwellers, by 2020 Develop a global partnership for development: Develop further an open trading and financial system that is rule-based, predictable and non-discriminatory. Includes a commitment to good governance, development and poverty reductionnationally and internationally Address the least developed countries special needs. This includes tariff- and quotafree access for their exports; enhanced debt relief for heavily indebted poor countries; cancellation of official bilateral debt; and more generous official development assistance for countries committed to poverty reduction

Address the special needs of landlocked and small island developing States Deal comprehensively with developing countries debt problems through national and international measures to make debt sustainable in the long term In cooperation with the developing countries, develop decent and productive work for youth In cooperation with pharmaceutical companies, provide access to affordable essential drugs in developing countries In cooperation with the private sector, make available the benefits of new technologiesespecially information and communications technologies